What should you do about ticket prices next season?
May 31, 2016
As executives involved in the ticket pricing discussion, we have all had that moment of panic where we think to ourselves, “What are we going to do about ticket prices this season?”
The question itself haunts us. We start running through different scenarios in our heads that keep us up at night, such as:
- We sold fewer season tickets last year than we did the 1, 2 and/or 3 years prior. We had a losing season and our fans are not buying at these prices; maybe we should decrease prices.
- We’ve nearly sold out our season ticket allocation every single year for the past five years; we have raised prices every season, and our fans are reselling individual game tickets for big games with at least a 50% markup.
- Our cheaper sideline sections near the goal lines sell like hot cakes, but year over year, we can never get these fans to upgrade to more pricey sections where there are holes.
Is your management team one that avoids or delays making pricing changes every year, then rolls the dice and makes your best collective group guess?
As you can imagine, the ticket pricing dilemma is part of a much larger issue – namely, defining the essential value of your product. We’ve all been told what happens when we assume, and this is especially true with ticket pricing.
This is why Aspire has developed our unique Yield Management Workshop. The workshop is based first on market research and second on a scientific pricing philosophy that is essential for the elements of the sales process to work.
To date, Aspire has conducted over 45 Yield Management workshops for collegiate athletic programs, pro teams and leagues around the globe. We challenge preconceived assumptions and help properties establish an actual VALUE for every seating section in the venue.
This value assessment is based on proximity to the playing surface, sight lines, closeness to and availability of amenities, and the benefits when seated in that section. In essence, we help you first to determine the “real estate” value for the best seat in the house, (aka “ocean- or lake- front property”). This then provides the standard in which the rest of your venue is scaled. Since this “Index Value” has no associated pricing per se, once established it would never change unless the venue or a seating section was renovated or new amenities were added.
The process evolves from there.
“It is a matter of getting the foundational ticket price correct first,” said Bill Fagan, Chief Operating Officer for Aspire. “In most cases, the ticket price is not the core motivator for a fan to purchase tickets. The top motivator is the fan’s affiliation with the team and the overall experience that they’ll receive on game day.
“Top of mind for me during our Yield Management sessions is making sure sports properties get over the hurdle that their fans are going to revolt if price increases. It is a delicate issue. However, more so, it is all about pricing strategically to the right segments that we know are going to be sitting in the stadium. If the sports property delivers the experience value that was sold to the fan, then often price is an afterthought in the fan’s decision to attend and come back.”
Through scientific market research coupled with historical and current ticketing performance, Aspire will give you the foundation to guide your pricing strategy with a significant level of confidence backed by hard, reliable data. We utilize venue heat mapping, market and peer benchmarks, fan avidity and price sensitivity research, and overall propensity to purchase.
Aspire will definitely challenge your way of thinking about price and many of the assumptions you have about your fans’ price sensitivity and elasticity of demand. Our goal is to highlight the ticket revenue opportunities available to your organization while keeping in mind non-revenue related items such as the schedule, conference realignment, coaching staffs, loss of key players, etc. to prepare you to make the tough choices.
Aspire does not make the decisions; that is the job of the executive team. We simply consult and outline the “ecosystem” of ticket pricing and related benefits to create the perceived value felt by each different fan segment. The result is the highest yield by maximizing BOTH ticket sales volume and the actual average price per seat.
When doing Yield Management, remember that for those fans motivated by price first, you have plenty of other seating locations in the venue that will satisfy their needs.
Yield Management is not about “sticking it” to your most committed fans and season ticket holders. Effective pricing is about being tactical and smart, balancing supply and demand with the market economy and fan elasticity.
The rollout of the optimal Yield Management plan does not happen overnight, but with Aspire’s expertise and proven successes in ticket pricing, we can help you develop the right multi-year strategy for the optimal pricing structure to amplify attendance and revenue.